MEC-007: International Trade and Finance is a course code for a Master of Arts (MA) program in Economics offered by Indira Gandhi National Open University (IGNOU) in India. The course covers various aspects of international trade and finance, including theories of international trade, trade policies, balance of payments, globalization, and trade in developing countries.
Course Structure
- Block 1: International Trade: Theories
- Block 2: International Trade: Policies
- Block 3: Balance of Payments and Adjustments
- Block 4: Globalization, Trade, and Developing Countries
- Block 5: Theory of Regional Blocks
- Block 6: Trade Policies in India
Course Curriculum
- Fundamentals of Health Informatics: Introduction to health informatics, healthcare systems, information systems in healthcare, ethical and legal issues in health informatics.
- Health Information Management: Medical coding and classification, health data standards, health data management systems, electronic health records (EHRs).
- Bioinformatics and Medical Statistics: Introduction to bioinformatics, genomics, proteomics, statistical methods in healthcare research.
- Health Information Systems: Healthcare information systems architecture, decision support systems, telemedicine, mobile health applications.
- Public Health Informatics: Public health surveillance systems, health information exchange, health promotion and disease prevention using informatics tools.
Q:1 Differentiate between Adam smith and Ricardo’s Theory of International
trade.
IGNOU MEC-007 Important Questions with answers- Adam Smith and David Ricardo were both influential economists who contributed to the field of international trade, each presenting distinct theories.
Theory of Absolute Advantage (Adam Smith)
- Basis: Smith’s theory, articulated in his seminal work “The Wealth of Nations” (1776), revolves around the concept of absolute advantage.
- Key Idea: Countries should specialize in the production of goods in which they have an absolute advantage, i.e., they can produce a good more efficiently than other nations.
- Trade Benefit: According to Smith, international trade allows countries to specialize in the production of goods they can produce most efficiently, leading to increased overall output and wealth.
Theory of Comparative Advantage (David Ricardo)
- Basis: Ricardo’s theory, presented in his work “Principles of Political Economy and Taxation” (1817), builds upon Smith’s ideas but introduces the concept of comparative advantage.
- Key Idea: Countries should specialize in the production of goods in which they have a comparative advantage, meaning they can produce a good at a lower opportunity cost than other nations.
- Trade Benefit: Ricardo argued that even if one country has an absolute advantage in producing all goods, there are still gains from trade when each country specializes in the production of the goods for which it has a comparative advantage. IGNOU MEC-007 Important Questions with answers
Labor Theory of Value
- Adam Smith: Smith’s theory is rooted in the labor theory of value, suggesting that the value of a good is determined by the amount of labor required to produce it.
- David Ricardo: Ricardo also acknowledged the labor theory of value but emphasized the opportunity cost of production in determining comparative advantage. IGNOU MEC-007 Important Questions with answers
Scope of Specialization
- Adam Smith: Smith’s theory suggests that countries should specialize in the production of goods where they have an absolute advantage, leading to a narrow scope of specialization.
- David Ricardo: Ricardo’s theory, with the concept of comparative advantage, allows for a broader range of specialization, even in cases where one country is less efficient in the production of all goods.
IGNOU MEC-007 Important Questions with answers – In summary, while both Adam Smith and David Ricardo advocated for the benefits of international trade, Ricardo’s theory of comparative advantage expanded upon Smith’s ideas by introducing the notion that even if a country has an absolute advantage in all goods, there are still gains from trade based on comparative advantage. Ricardo’s insights have had a profound and lasting impact on the understanding of international trade. IGNOU MEC-007 Important Questions with answers
Q;3 Indicate the causes as explained by Ricardo that result in the differences in opportunity cost and comaparative advantage.
Q:4 Describe magnification effect in the context of H-0 model
Q:5 What theorem is derived from the assumption in the H-0 model that the two countries share the same technology and that markets are perfectly competitive? Explain
Q:6 Explain Rybczynski Theonem in the context of H-0 model.
Q:7 Leontief Paradox is empirical critique of the H-0 theorem. Explain
Q:8 Briefly discuss the phenomenon of ‘missing trade’
Q:9 Why is it necessary to view comparative advantage theory of international trade in dynamic terms?
Q:10 Gravity model of international trade explains what kind of trade? Discuss.
Q:11 Demand based theory of international trade is named after which economist? Explain.
Q:12 Briefly discuss the phenomena of intra industy trade in real world economies.
Q:13 Critically examine the nature of strategic trade theory.
Q:14 What do you understand by the term ‘ fkee trade’ ?
Q:15 How do countries benefit from free trade when domestic markets are Theory perfectly competitive ?
Q:16 Do countries benefit fiom trade when there is monopoly in the domestic market ?
Q:17 Explain how the existence of economies of scale in certain industries can give rise to gains fiom trade
Q:18 Critically discuss the the relationship between globalisation and the free trade.
Q:19 What are the gains associated with free trade?
Q:20 What are the arguments given in favour of protectionist trade strategy? Discuss.